Anyone who claims to know the history of civilization must know something of the history of China. Even so, Peng Xinwei?s monumental book, published almost half a century ago in Chinese and almost two decades ago in English translation, has remained obscure among economists.? The translation, the only version likely to be accessible to most readers outside of China, seems never to have been reviewed in any economics journal or Web site, though it is known to historians and numismatists who specialize in China. I am therefore writing to call attention to a work that has few peers as a feat of scholarship in monetary history.

Peng Xinwei (1907-1967) studied economics at the London School of Economics and apparently also studied or lived in Japan at some point. Before the communist takeover of China in 1949 he worked as a banker; afterwards, he taught economics at Fudan University in Shanghai.? The first edition of his book appeared in 1954. He finished revising the third edition in 1962 and it was published in 1965. He died as one of the hundreds of thousands of victims of Mao?s great bonfire of Chinese civilization, the Cultural Revolution. Edward Kaplan (1936-2006), the translator, was an associate professor of history at Western Washington University. The translation, an impressive feat of scholarship in its own right, was published by the university?s Center for East Asian Studies, from which it remains available.

The book spans the whole of Chinese monetary history from centuries before the birth of Christ to the end of imperial rule in 1911. Had Peng written about the republican period, his life might have been cut short even sooner. Peng sprinkled some Marxist catch phrases about feudalism, imperialism, and colonialism into his writing, but they are merely protective coloration and do not affect his analysis, which is far more influenced by Carl Menger than by Karl Marx.

The book is divided into eight parts, corresponding to major Chinese dynastic periods. Within each part, Peng covers the monetary systems, purchasing power of money, monetary thought, and credit institutions of a period. To understand how large a task Peng set for himself, one must understand that China?s huge size and population make it in many respects more like a continent than a country. China has frequently had multiple monarchies within its current borders, and even when under a single government has had wide provincial or local variations in monetary arrangements.

Certain historical motifs strike the reader. One is the persistence of copper rather than gold or silver as the basis of most everyday monetary transactions. Another is the resort to depreciation, fiat paper money, and relatively high inflation by dying dynasties trying to finance their governments. The dynasties that replaced them extinguished the old currency and followed sounder monetary policies until they too got themselves into financial difficulty. Yet another theme is the paucity of Chinese monetary thought, inferior to European monetary thought well before Europe?s scientific revolution. Finally, there is the interplay between the government and the private sector. The government frequently failed in providing an adequate supply of coinage or a trustworthy paper currency. The private sector, to the extent it was allowed to do so or could evade the law, sought to fill the gaps, but often met with hostility from government officials that was counterproductive to China?s economic development.

China was the first country to have coins, or the first along with Lydia in Asia Minor; the first to have paper currency, free banking (competitive issue of notes), and a government monopoly of paper currency; perhaps the first to have a kind of currency board (circa 1270); and a pioneer in some fairly sophisticated forms of exchange control. By 1700, though, it had fallen behind European financial practice, and it was slow to adopt more modern forms of organization and banking technique. After adopting them, it then discarded them for a while under communism, which was what turned Peng himself from banking to an academic career.

I am a reader of Chinese monetary history but, knowing no Chinese, not a scholar of the subject. Among those who are scholars, the book continues to be cited in English and, I am told, in Chinese. Like other works of its kind, it has been superseded in many particulars. The reason for its continuing value is the flavor of the intellect that could produce a work of such scale and scope ? an intellect rare enough in any time or place that it merits notice even decades belatedly.

Kurt Schuler is Senior Fellow in Financial History at the Center for Financial Stability in New York. He is the editor of Historical Financial Statistics, a free, online data set at the Center. These are his personal views.

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